You emigrated from South Africa! Really? You 100% sure?
What’s next? Read more about the post emigration TAX SHOCKERS and Curve Balls to dodge, now that you are out of the residency system.
Did you correctly emigrate from South Africa and what is you understanding of “emigrated”?
#Taxmigration is our hashtag. The Income Tax Act use the words “cease to be a resident”. Tax specialists, like writer prefers to add the word <tax> resident to ensure we on the same page! The reason being, there is a difference between a tax resident and and an Exchange Control resident! Oops, your #financialemigration sales person did not disclose this to you?
Being a person not resident for tax (tax non-resident) brings certain benefits, obligations and and often switch off certain tax exposures, but not all! Sorry, not home and dry as yet!
Once solely tax resident in a treaty country, you may escape SARS Income Tax but not SARS Estate Duty!
Yes, countries like Mauritius and the UAE have forced heirship or Sharia Succession rules, yet this does not remove the estate duty (situs or death taxes) in South Africa! What was not inherited by your spouse, will trigger SA Estate Duty to the extent the value exceeds R3,5m a year!
Once you have notified SARS of you ceasing tax residency, you need not only pay the exit tax, you need to update your SARS efile profile to reflect your foreign residential and postal address. How sure are you that your #financialemigration consultant correctly executed the SARS update?
Using foreign mobile numbers remain to be somewhat of an issue, yet you can change the security settings (oneFile) to send a verification pin to your email address. Oh no, don’t tell me you allowed your #financialemigration consultant sole access? They did not inform you that you entitled and best advised to ensure you have equal and full access to your own eFile profile? Bad bad bad! Very bad!
Tax migration does not equate to a formal or financial emigration and vice versa! Formal or financial emigration as the product punters refer to it, does not deal with or sort out your tax residency status! Tax exit or #taxmigration is indeed the first step to formal emigration at a later stage. At the status, if ever, when it makes sense to break ties with your SA bankers!
Yes, we advocate you at least complete the less expensive tax emigration! This is indeed the actual process you need to ensure is in place before you even consider formal emigration!
Yes please!! Do ensure you complete the more certain, #taxmigration soonest! Tax exit or ceasing tax residency is indeed not as restrictive as formal or financial emigration. Using the DTA of tax treaty rules to move your tax residency from SA to another country, does not require you to lie about your intention NEVER to return to SA. Most of us, on work permits only, know deep down there is always an option to move back!
Best part of treaty based tax residency change, is that the counting and recording of days are no longer the bain of your life! Days counting for most people, becomes totally irrelevant! It begs the question why does so many so called taxperts spend so much time on the physical presence test, when its so irrelevant for most! Born in SA or ordinarily resident in SA taxpayers can also read over the garbage on 330 days outside SA test! Its just so irrelevant for most #Saffas and @wegkaner taxpayers.
Formally emigrated: what now? Home and dry? No!!!! SARS has repeatedly confirmed that formal or #financialemigration does not guarantee that you are no longer ordinarily resident in SA! Intention not to return may be indicated but its not guaranteed as you only undertook, to for period of 5 years only, not to return to SA without notifying the SARB aka FinSurv or Excon at the Reserve Bank – there was no undertaking to SARS not to return to SA.
It follows that you are obliged to annually or at least on a regular basis (or for example when you inherit or buy SA situs assets) re consider your tax residency and the DTA rules. Yes, the tax treaty or DTA definition of resident, read with the relevant treaty tie-breaker tests, can transfer a person not ordinarily resident in SA, back into the tax residency fold. DTA rules trump the ITA definition of resident. Also, we remind you that ordinarily resident is not a defined term!
Formally emigrated as no longer ordinarily resident and only relied in the formal emigration service provider filing and obtaining a tax emigration clearance certificate and you feel relieved? Shocker, you at risk!
Persons basing tax emigration on ordinarily residency being terminated is advised to obtain a Tax Administration Act section 223 opinion explaining why you considered no longer ordinarily resident. Second shocker: Said section 223 clearly state the company that filed for your formal emigration may NOT issue the written opinion! An independent SARS approved tax practitioner must issue the certificate. No, not a lawyer! Rather go for a Master Tax Practitioner as said person is TAA approved and best placed to issue the opinion
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